merger of national vocational student loan insurance act of 1965 with student loan insurance program of higher education act of 1965

merger of national vocational student loan insurance act of 1965 with student loan insurance program of higher education act of 1965 Sec. 116. (a) Section 435 of the Higher Education Act of 1965 is amended— (1) by redesignating subsections (a), (b), (c), (d), (e), and (f) as (b), (d), (e), (f), (g), and (h), respectively; (2) by inserting before subsection (b) as so redesignated the following new subsection: “(a) The term ‘eligible institution’ means (1) an institution of higher education, (2) a vocational school, or (3) with respect to students who are nationals of the United States, an institution outside the States which is comparable to an institution of higher education or to a vocational school and which has been approved by the Commissioner for purposes of this part.”; (3) by striking out in subsection (b) (as so redesignated) “eligible institution” and inserting in lieu thereof “institution of higher education”, by striking out in the second sentence of such subsection “any institution outside the States which is comparable to an institution described in the preceding sentence and which has been approved by the Commissioner for the purposes of this title, and also includes”; and (4) by inserting after subsection (b) (as so redesignated) the text of subsection (a) of section 17 of the National Vocational Student Loan Insurance Act of 1965 amended as follows: (A) Strike out “(a)” and insert in lieu thereof “(c)”, (B) Strike out “eligible institution” and insert in lieu thereof “vocational school”, and (C) Strike out “Act” in clause (4) (C) and insert in lieu thereof “part”. (b) (1) Section 425(a) of such Act is amended by striking out “(1)” after “Sec. 425. (a)” and by striking out paragraph (2). (2) Section 427(a) (2) (C) (i) of such Act is amended by striking out “institution of higher education or at a comparable institution out-82 Stat. 1024side the States approved for this purpose by the Commissioner” and inserting in lieu thereof “eligible institution”. (3) Section 428 (a) (6) of such Act is repealed. (4) Section 434 of such Act is amended by striking out “10 per centum” and inserting in lieu thereof “15 per centum”. (5) Section 436(a) of such Act is amended by striking out “title and the National Vocational Student Loan Insurance Act of 1065” and inserting in lieu thereof “part”. (c) (1) The National Vocational Student Loan Insurance Act of 1965 is repealed. (2) All assets and liabilities of the vocational student loan insurance fund established by section 13 of the National Vocational Student Loan Insurance Act of 1965, matured or contingent, shall be transferred to, and become assets and liabilities of, the student loan insurance fund established by section 431 of the Higher Education Act of 1965. Payments in connection with defaults of loans made on or after the sixtieth day after the date of enactment, of this Act and insured by the Commissioner (under the authority of subsection (e) (3) or (e) (4) of this section) under the National Vocational Student Loan. Insurance Act of 1965 shall be paid out of the fund established by such section 431. (d) Section 433 of the Higher Education Act of 1965 is amended to read as follows: “direct loans “Sec. 433. (a) The Commissioner may make a direct loan to any student who would be eligible for an insured loan for study at a vocational school under this part if (1) in the particular area in which the student resides loans which are insurable under this Act are not available at the rate of interest prescribed by the Secretary pursuant to section 427(a)(2)(D) for such area, or (2) the particular student has been unable to obtain an insured loan at a rate of interest which does not exceed such rate prescribed by the Secretary. “(b) Loans made under this section shall bear interest at the rate prescribed by the Secretary under section 427 (a)(2)(D) for the area where the student resides, and shall be made on such other terms and conditions as the Commissioner shall prescribe, which shall conform as nearly as practicable to the terms and conditions of loans insured under this Act. “(c) There is authorized to be appropriated the sum of $1,000,000 for the fiscal year ending June 30, 1969 and for each of the two succeeding fiscal years to carry out this section.” (e) (1) Except as provided in paragraphs (2), (3), and (4): (A) This section (and any amendment or repeal made thereby) shall apply to loans made on or after the sixtieth day after the date of enactment of this Act; and the terminal date applicable under the first sentence of section 5(a), under section 9(a) (2) (B), and under section 9(a)(4) of the National Vocational Student Loan Insurance Act shall, instead of October 31, 1968, be deemed to be (i) the day immediately preceding such sixtieth day, or (ii) with respect to any particular lender or State or nonprofit private agency to which paragraph (3) relates, the last day of the period required for modification or termination of, or refusal to extend, the Commissioner’s agreements with such agency. (B) In computing the maximum amounts which may be borrowed by a student who obtains an insured loan on or after such sixtieth day, and the minimum amounts of repayment allowable with respect to sums borrowed by such a student, there shall be included all loans, whenever made, (i) insured by the Commissioner, or a State, institution, or organization with which the 82 Stat. 1025Commissioner has an agreement under section 428 (b) of part B of title IV of the Higher Education Act of 1965 or section 9(b) of the National Vocational Student Loan Insurance Act of 1965, or (ii) made by a State under section 428(a) (2) (B) of such part or section 9(a) (2) (B) of such Act, or by the Commissioner under section 433 of such part. (2) Clause (i) (attendance at eligible institution) and clause (iv) (VISTA service) of section 427(a) (2) (C) of the Higher Education Act of 1965, shall apply to loans made by the Commissioner and, with the consent of the lender, loans insured by the Commissioner, to students for study at vocational schools, which are outstanding on the sixtieth day after the enactment of this Act, but only with respect to periods of service or attendance occurring on or after such sixtieth day. (3) This section (and any amendment or repeal made thereby) shall not apply so as to require violation of any commitment for insurance made to an eligible lender, or of any line of credit granted to a student, prior to the sixtieth day after enactment of this Act, under the Higher Education Act of 1965 or the National Vocational Student Loan Insurance Act of 1965, or, except with the consent of the State or non-profit private agency concerned, impair the obligation of any agreement made pursuant to section 428(b) of the Higher Education Act of 1965 or section 9(b) of the National Vocational Student Loan Insurance Act of 1965. The Commissioner of Education shall undertake to obtain necessary modifications of agreements entered into by him pursuant to section 428(b) of the Higher Education Act of 1965 or section 9(b) of the National Vocational Student Loan Insurance Act of 1965 and in force upon the date of enactment of this Act so as to conform the provisions of such agreements to the requirements of such section 428(b). If, however, such modifications cannot be obtained because a party to such an agreement is subject to a statute of a State that prevents such party from complying with the terms of such modification, the Commissioner shall not, before 120 days after the adjournment of such State’s first regular legislative session which adjourns after January 1, 1969, exercise his authority to terminate, or to refuse to extend, such agreement. (4) A certificate of insurance or of comprehensive insurance coverage pursuant, to section 11 of the National Vocational Student Loan Insurance Act of 1965 may be issued or made effective on or after the sixtieth day after the date of enactment of this Act with respect to loans made prior to such sixtieth day without regard to any amendment or repeal made by this section.